Telefonica Sells Austrian 3G License

Austria's mobilkom has taken over Telefonica Moviles 3G license holder in the country, 3G Mobile Telecommunications. "With this transaction we've also acquired the right to use 3G Mobile's two UMTS frequency blocks amounting to 9.8 MHz. Thus, mobilkom austria holds a total of four packages with 19.8 MHz (FDD)", confirms Boris Nemsic, CEO of mobilkom austria and COO Wireless Telekom Austria.

The takeover was approved by the regulatory authority on 17 December 2003. In order to achieve a balance of the UMTS spectrum on the domestic competitive market, mobilkom austria will sell one of now four UMTS blocks in its possession by 31 January 2005, which is in line with what the regulatory authority is expected to stipulate. "With this basic set of frequencies we'll be holding almost 15 MHz of UMTS frequencies in the long term. Thus, we are in the position to design our UMTS network even more efficiently and reasonably in terms of costs", said Nemsic.

One stipulation of the UMTS licence was that a coverage of 25% be achieved by the end of 2003. Today, mobilkom austria already has a population coverage of roughly 50%, which by far exceeds the limit set by the regulator as well as the other operators' coverage. However, as regards 3G Mobile's coverage obligation, this would not be required at all: the coverage obligation for the UMTS spectrum added by 3G Mobile is met by mobilkom austria's UMTS network.

With this sale Telefonica is finally withdrawing from the Austrian market. The company recognised that its own growth potential was too small to operate as sixth UMTS provider in a country with a population of just over 8 million. Nevertheless, 3G Mobile will continue to exist as a separate company under the flag of mobilkom austria and concentrate mainly on the exploitation of the UMTS frequency usage rights."

Posted to the site on 2nd January 2004